Improving Public–Private Partnerships for Renewable Electricity Infrastructure in Lower- and Middle-Income Countries

Abstract

Renewable electricity infrastructure is a key technical strategy for achieving energy access for all people. In addition, the construction of renewable electricity infrastructure is urgently needed to aid in the fight against the climate crisis. Private investment in infrastructure is one way of enabling this change; for example, in 2017, the World Bank reported $27 billion in private participation in renewable electricity infrastructure. In order to maximize the benefit of these investments, this paper seeks associations between hypothesized critical failure factors and observed failures in a dataset describing renewable electricity public–private partnerships (PPP). The dataset used in this analysis includes information on 1,769 high capital cost renewable electricity infrastructure projects with private participation and at least a five-year history. For renewable electricity projects, statistically significant relationships were found between canceled and distressed public–private partnerships and the selected primary revenue stream, contract award method, and type (Greenfield, Brownfield, or management and lease contract). Generally, project features that shifted more risk to the private partner were more likely than expected to fail (Brownfields and competitively awarded contracts). These results contribute empirical knowledge of critical success and failure factors specific to renewable electricity PPP. In addition, these results provide empirically-based guidance regarding PPP organization or selection to any entity seeking successful private investments in renewable electricity. Broadly, by contributing to an increase in the number of successful renewable electricity projects, this work seeks to increase the supply of clean energy. This supports Sustainable Development Goal 7, which aspires to increase both energy access and the speed of transition to clean energy.